12.01.2009

JCB makes further cuts

JCB has announced a further 684 lay-offs in the UK due to poor order intake, the company says that production in the first quarter of 2009 will be 75 percent lower than the first quarter of 2008, while an anticipated upturn in the second quarter is showing no sign of materialising.

JCB blames the poor sales primarily on the lack of credit facilities from banks to fund machine purchases along with low levels of business confidence.

Chief executive Matthew Taylor said: “Back in November we forecast a moderate second quarter recovery in 2009 based on the fact that Governments around the world had pumped a huge amount of money into recapitalising financial institutions and had committed to stimulus packages which included significant spending on public construction projects.”

“Two months later, despite the recapitalisation, customers are still struggling to buy machines because of a lack of available credit. And with Government-funded construction projects not moving forward quickly enough, this means the anticipated second quarter recovery simply won’t happen.”

“The ongoing reluctance of the banks to provide credit is aggravating an economic downturn which is now becoming much steeper than we could have ever envisaged. This unprecedented situation needs to be addressed with some urgency so that confidence and stability can return; otherwise irreparable damage will be caused to the UK’s manufacturing industry.”

JCB’s Staffordshire plants affected by the redundancies are: It Headquarters in Rocester; JCB Heavy Products in Uttoxeter; JCB Compact Products, JCB Earthmovers and JCB Cecilly Mills Operations in Cheadle and JCB Cab Systems in Rugeley. JCB Transmissions in Wrexham and JCB Power Systems in Derbyshire.

In October employees voted to accept a shorter, 34-hour working week, a move which helped save 332 jobs. Last week - when there was no production at JCB – the company undertook its biggest-ever training initiative in its history, with more than 2,000 employees completing a programme which will result in achievement of NVQ and City and Guilds qualifications.

The latest job losses affect 593 shop floor and 91 staff positions and are in addition to 1,000 redundancies announced since July. JCB employs around 7,900 globally, with around 4,800 in the UK. JCB has more than 4,300 employees in Staffordshire.